1976 (9) TMI 16 - HC - Income Tax

Summary

Issues:
- Claim for depreciation on a tank as part of agricultural income computation.
- Interpretation of provisions under the Tamil Nadu Agricultural Income-tax Act, 1955 and related rules.
- Applicability of Central Income-tax Act provisions on depreciation.
- Requirement of furnishing prescribed particulars for claiming depreciation.

Analysis:
The petitioner sought depreciation on a tank constructed for workers' use in agricultural income computation, which was rejected by authorities citing inapplicability of depreciation as per the Central Income-tax Act. The petitioner relied on section 5(f) of the Tamil Nadu Agricultural Income-tax Act, 1955, and rule 4 of the Tamil Nadu Agricultural Income-tax Rules, 1955. Section 5(f) allows depreciation for buildings, machinery, etc., required for deriving agricultural income, including structures for worker amenities as per the Explanation. Rule 4 mandates following Income-tax Act rates for depreciation. The petitioner argued that the tank qualifies as a depreciable asset under the Act, emphasizing the Explanation's inclusive definition of buildings. However, the court noted the petitioner's failure to establish entitlement to a specific depreciation rate as required by the Income-tax Rules, as only buildings in certain categories have prescribed rates.

The court acknowledged the petitioner's argument regarding the tank's classification as a building under the Act but emphasized the necessity of furnishing prescribed particulars for claiming depreciation. As the petitioner did not provide the required particulars to determine the applicable depreciation rate under the Income-tax Rules, the claim for depreciation on the tank was deemed unsubstantiated. The court highlighted that section 5(f) explicitly mandates furnishing prescribed particulars for claiming depreciation, which the petitioner failed to do in this case. Consequently, the court upheld the authorities' decision to deny depreciation for the tank in computing agricultural income for the relevant year.

In conclusion, the court dismissed the petition, emphasizing the petitioner's failure to furnish necessary particulars to support the claim for depreciation on the tank. The court held that, based on the specific facts of the case and the lack of prescribed particulars, the denial of depreciation by the Tribunal and lower authorities was justified. The petitioner's general contention that the tank qualifies as a depreciable asset without providing the required particulars was insufficient to support the claim. Therefore, the court ruled against the petitioner, upholding the decision to disallow depreciation on the tank and ordered no costs to be awarded.